When you exchange goods and or services without the use of money, you are bartering. Bartering is a very creative way to do business nowadays, especially to help sustain your business and lower expenses.
Due to the flexibility, barter/trade has grown in popularity. It has evolved into a more sophisticated business module when compared to the old days where a local farmer trades eggs and livestock for fencing. However, the concept is still the same. You exchange goods and or services for something that you want or need. Unlike in the past, where direct trading was the only method of bartering, modern times have embraced a commercial platform for businesses where all kinds of products and services are traded multi-directionally. No longer do companies have to search for one-to-one direct trade relationships.
So what are the benefits of bartering to a business?
Generate new sales, new market penetration and customers
New sales and new customers are important for a company’s’ survival. The mistake most companies do is cut-down their advertising budget once the cash flow is tight. Businesses must constantly find ways to generate new customers and new sales and through a barter exchange, it helps you reach a larger client base.
How is that possible?
Members of the exchange are looking for products and or services they need so that they can spend their trade dollars. Since they are already bartering, they know the benefits of barter and the leverage they have with their barter dollars. Hence, these are captive customers you can tap into because they would rather spend their barter dollars with barter members, instead of buying in cash from someone else.
Reduce lost money from idle inventories
Every time your employees have downtime or whenever unsold stock sits on your shelves equates to lost money. When this happens, you are forced to reduce prices so that idle inventories can be moved because your stock either becomes obsolete or the products lose value. However, through a trade exchange, you can sell the inventory at full retail price on trade; hence at the same time fully utilizing idle time from employees.
Cash is king….so conserve it
In today’s economy, it’s more important to have cash or liquidity. Most businesses do not realize that when they barter their goods and or services, it becomes their biggest asset. This is because how much cash a company has in the bank will not restrict their purchasing power. Purchasing is done through the potential to make new income rather than from your business sales history. Every business will experience a shortage of cash. However, when barter enables you to continue to exchange a valuable service or product that you need, the lack of cash resources does not become an issue. We have business owners that barter for supplies, hotel stays, advertising, entertainment, employee incentives, that cost them next to nothing.
With over 33 years in the barter industry, we have found that although barter has a universal application for virtually all business, industry and professional services, the mindset of the business owner also plays an important role in successful trading.
The above are only three tips on the benefits of barter/trade. If you would like more information on how Tradebank can serve your business, please contact us.